The Dow gains 161 points today as bargain hunters stepped into the beaten down market.
Fundamentals
Even though Asia closed red across the board today, the US market was ready to open much higher as index futures pointed higher way before market opening.
This happened even before the better than expected Jobless Claims and Philley Fed are announced, making today's move look more like bargain hunting. The
nuclear situation in Japan and the Libyan Crisis is still far from over and there is really no credible stimulus to explain today's seeming bullishness, as such,
caution is advised. Tomorrow's Quadruple Witching will see a spike in market volatility
and might even lead to some selloff as investors take a defensive stance ahead of an extremely uncertain weekend.
Technicals
Even though the Dow made a strong day today, it merely traded within the trading range of yesterday's drop which makes it more of a sideways day than a bullish one.
In fact, this looks like one of those bull traps that every bear trend contains and I would be cautious with interpreting it too positively. Bear momentum
continues to rise on our short term momentum indicators even though the market closed upwards today and total equities put call ratio continue to incline
towards put options trading.
For now, the Dow remains in a short term bear trend, intermediate bull trend and primary bull trend.
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Market Slumps on Japanese Nuclear Worry
The Dow shed another 137 points today as Asian market comes under heavy pressure from the Japanese nuclear crisis.
Fundamentals
Despite a better than expected Empire State Index pointing towards continued economic growth, the US market opened deeply red and closed off its lows in yet another
high volatility day. Pressure came from Asia as the Nikkei225 made the biggest single day drop since 1987. The regional and global effects of the Japanese
nuclear incident is yet unknown, leading to a spike in volatility in the market. The VIX surged over
15% today as traders bet on more volatility. In fact, call options trading on the VIX formed more than two thirds of options trading volume today. Indeed,
as I said in my report to paid subscribers yesterday, this is going to be a week of volatility and depending on how the nuclear incident and the middle east
work out, this could get alot better or worse. Investors continue to rush back into the safety of bonds today as bond yields continue to drop across the board.
Technicals
Indeed, this is a time of extremely volatility and directional risk. The market can literally go anywhere now that it has breached the critical 50MA intermediate support.
As such, this is definitely a time for more volatility based play on delta neutral stance like the
Straddle. Next support level for the Dow is around the 11,500 level.
For now, the Dow turns a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Fundamentals
Despite a better than expected Empire State Index pointing towards continued economic growth, the US market opened deeply red and closed off its lows in yet another
high volatility day. Pressure came from Asia as the Nikkei225 made the biggest single day drop since 1987. The regional and global effects of the Japanese
nuclear incident is yet unknown, leading to a spike in volatility in the market. The VIX surged over
15% today as traders bet on more volatility. In fact, call options trading on the VIX formed more than two thirds of options trading volume today. Indeed,
as I said in my report to paid subscribers yesterday, this is going to be a week of volatility and depending on how the nuclear incident and the middle east
work out, this could get alot better or worse. Investors continue to rush back into the safety of bonds today as bond yields continue to drop across the board.
Technicals
Indeed, this is a time of extremely volatility and directional risk. The market can literally go anywhere now that it has breached the critical 50MA intermediate support.
As such, this is definitely a time for more volatility based play on delta neutral stance like the
Straddle. Next support level for the Dow is around the 11,500 level.
For now, the Dow turns a short term bear trend, intermediate bull trend and primary bull trend.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Chart of Dow Made Using Telechart. Want Your Own Charting Software? Download FREE Now!
Praying for Japan
Last week was a turbulent week. The Dow retreated 1.03%, S&P500 retreated 1.28% and the Nasdaq composite retreated 2.48% on a week on week basis.
Just when we thought the situation in the Middle East is chaotic enough, Japan got hit by an unfortunate earthquake resulting in a huge tsunami that caused
devastation across the north-eastern region. In fact, a nuclear facility is damaged enough to cause concerns of a meltdown which could affect the country
and the region.
In the face of such turmoil, world markets were largely down last week despite the pullback in oil price. In fact, Asian markets continue to come under pressure
right now, Monday morning in Asia. As such, it is going to be yet another volatile week made more volatile by the Quadruple Witching on Friday.
We continue to pray for the lost and missing in Japan.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
Just when we thought the situation in the Middle East is chaotic enough, Japan got hit by an unfortunate earthquake resulting in a huge tsunami that caused
devastation across the north-eastern region. In fact, a nuclear facility is damaged enough to cause concerns of a meltdown which could affect the country
and the region.
In the face of such turmoil, world markets were largely down last week despite the pullback in oil price. In fact, Asian markets continue to come under pressure
right now, Monday morning in Asia. As such, it is going to be yet another volatile week made more volatile by the Quadruple Witching on Friday.
We continue to pray for the lost and missing in Japan.
My Market Analysis Sent Straight Into Your Email Daily For Only $5/Month! **My analysis will only be posted here once every other day.
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